Being a mom is rewarding in many ways, but it is generally not financially rewarding. You may give up your career to raise kids, or count on your spouse to handle finances. Often times moms make many sacrifices for the sake of their families. But you don’t want to make mistakes that are going to leave you broke by the time you reach retirement age. To help you make the best decisions when it comes to your family and your finances, Freedom Debt Relief has four financial tips for moms everywhere.
Tip #1: Stay Involved in Family Finances
In some families, mom handles much of the finances, and in others, it is the dad. Actually, it is important for both spouses to be involved. Often, the stereotype is that mom manages the day-to-day operations such as utilities bills and groceries, while dad manages things like financial investments and retirement. If this is the case in your home, Freedom Debt Relief suggests that you both stay involved in every aspect of your family’s finances. Both of you should know what your recurring expenses are and both of you should know what your financial future looks like. So, talk to your spouse and ask questions about any financial areas that you are not currently involved in.
Tip #2: Ensure that Your Spouse Has Insurance
Whether both of you work, or just one, an insurance plan can protect you from financial ruin in the event of a tragic loss. While the amount and type can vary from family to family, Freedom Debt Relief recommends that you at least have a term insurance policy outside of your spouse’s place of employment. That way, you’ll still have the policy even if your spouse leaves his current company. Permanent insurance with a cash value may also be something to consider. The amount of insurance that you and your spouse each carry may vary depending on your circumstances and current bills. Ideally, look for a plan that could help cover living expenses for at least one or two years in the event that you lose your spouse. If he is responsible for more than 50 percent of the income, you may want to consider a policy that covers your family even longer.
Tip #3: Review Beneficiaries
Not only should you make sure you and your spouse carry insurance policies, you also need to review your beneficiaries. According to Freedom Debt Relief, in many cases, 401ks, insurance policies, and other investment and retirement accounts have no one listed as a beneficiary. And in other cases, the beneficiary is someone else, like an ex-spouse. These issues can trigger unnecessary tax bills or even mean that the money goes to someone it shouldn’t. This is an easy fix while your spouse is alive, but is nearly impossible if they pass away. So, take care of this sooner rather than later!
Tip #4: Model for Your Kids How to Take Care of Finances
As a mom, you make many sacrifices for your children. But part of your job is to teach your children how to stand on their financially once they are grown. There is nothing wrong with treating your adult children to a special gift, vacation, or another surprise, if you can afford to. And if there is an emergency situation where your child really needs help, you will of course want to help them. However, if they become dependent on you to bail them out every time they fall short on their rent or car payment, then you might have a more deep-rooted problem. Freedom Debt Relief suggests teaching them early on how to manage their finances. You may have to practice a little tough love along the way, but in the end, may be better for them, and you too!